European market
As expected, the first echoes of barley yields in France are very heterogeneous, reflecting the weather conditions of recent months. However, yields are lower than last year's but remain mixed compared to the 5-year average. The national average will nevertheless probably be lower than in recent years, but by how much remains to be seen.
Grain prices did not change much yesterday, with a strong sensitivity at present to the evolution of currency parities. This morning the euro was at 1.1240 against the dollar and crude oil remains a little under pressure at 37.80 $/b in New York.
The sharp drop in crude oil yesterday caused a decrease in palm oil and rapeseed, the latter was dropping by around 4 €/t. The prospect of a second pandemic wave is haunting the minds of operators who are extremely cautious about a sustainable return of consumption. Operators will be attentive today to the palm oil export figures for Malaysia for the period June 1-25.
Activity on the international scene remains weak and exporters are eagerly awaiting calls for tenders, in a context of great uncertainty about the dynamics of demand.
American market
Yesterday US market prices marked a decrease in all products. Weather conditions remain very favourable for future corn and soybean crops, while harvest pressure is felt in wheat.
In addition, financial markets, and particularly stock markets, were on a downward trend yesterday with a coronavirus pandemic that does not seem to be weakening throughout the American continent.
The funds in this context were once again net sellers yesterday for 5,000 lots of corn and 5,000 lots of soybeans. They were also net sellers for 3,500 lots of wheat.
It’s rare that the funds have such a large net short position in corn. It must be said that this market remains very heavy in light of the upcoming global crop prospects for the 2020/2021 MY.
Black Sea market
Russian wheat prices for new crop continue their decline that began in mid-June. The wheat 12.5% FOB Novosibirsk was yesterday at 201 $/t, down by -7 $/t since June 11th. The Ukrainian wheat 11.5% FOB Odesa follows the same trend to be posted at 195 $/t. The return of dry weather in the southern regions of these two countries should allow the first wheat cuts to start soon. Both exporters and importers will be attentive to the first information regarding the yield and quality of the 2020 harvest.
In spite of the dry spring, the first cuts will not be ahead of a normal year, a sign of a good grain filling thanks to the frequent rains in May and June.